One Small Electric Car and Its Big Fight for Buyers

In the race to build the first affordable electric car, one company is taking an unusual approach: they're not treating it as a race at all. "We don't want to be the first, or the biggest. We just want to be the best," says Mike McQuary, CEO of Wheego electric vehicles .

The Atlanta-based startup will begin selling its first electric vehicle, a small, functional buggy called the Whip, this August in a handful of dealerships around the country. It'll cost around $19,000, minus a newly-revised $7,500 tax credit just announced by the IRS. Despite its price, the Whip is up against a bevy of capable competitors: fellow startups like Tesla, Coda and Zap, to say nothing of the big boys Nissan, GM, Toyota and Honda.

McQuary has been here before; as the founder of MindSpring, the early Internet service provider, he faced — and withstood — crushing opposition from ISPs like AT&T, IBM and Microsoft. It was back in his MindSpring days that McQuary first came across electric cars, though he says he doesn't have any particular predilection for vehicles. His cofounder at MindSpring, Charles Brewer, had one of the early electric RAV4's that Toyota was test-leasing to customers around the country. Then California's new emissions mandates were repealed, and Toyota took back Brewer's car. It would be years before electric cars crossed McQuary's mind again. (Below, the RAV4 EV, pilot tested in the 1990s.)

In 2000, MindSpring merged with Earthlink; three years later, McQuary left his post as CEO to found a private equity merchant bank with a college buddy. They shopped around for projects, buying a TV station and taking pitches from entrepreneurs. "Then a guy came along who wanted to start a company that would build better golf carts," McQuary says. "We all sort of shuddered, but I went and learned about the industry."

This is the point in the story that is supposed to birth a breakthrough — instead, it was a dead end. The golf cart market, McQuary says, is a "wonderfully managed oligopoly," with three major companies controlling 95% of the market. "I knew there wasn't an opportunity in the golf cart industry," he says, "but I kept veering into research on using modified [electric] golf carts on the open road." Memories of Brewer's RAV4 came to mind. "I remembered that these cars had a start out of the gate, and that people were emotional and enthusiastic about them," he says. "When I first started up MindSpring, I saw that kind of emotional expression. I know that consumer voice, and I thought: I know how to reach and appeal to that passionate base of early adopters."

The lightbulb flickered until he saw the documentary Who Killed the Electric Car. The technology, the political climate, and what McQuary calls the "macroawareness" over dependence on foreign oil all convinced him that now was the time to garner what he had learned and start something. "I knew I could make a great electric car, and that consumers would buy it."

The result of his inspiration was RTEV, an electric vehicle company that got its start making electric recreational and hunting vehicles. The original plan, he says, was to begin a streetcar division housed under the same umbrella company. "Then we realized about a month ago that the recreational division had very little technology overlap with the street division, and the dealer network—which is all powersports guys — didn't have any overlap with car dealers," he says. As of late May, Wheego was spun off to become its own entity, with McQuary at its helm.

The pair of cars that are the product of his vision — one "low-speed vehicle" or "LSV " certified for a round-town 25MPH, and one "full-speed vehicle" capable of highway speeds — are quirky, attractive and well-priced. The Whip, the LSV, is a two-door Smart-car doppelganger that holds two people and goes about 40 or 50 miles on a charge. It gets its juice from a normal three-prong household plug, mated to a normal 110V household outlet, but it can also be hooked up to a 220V outlet for faster refills. A full charge takes six to eight hours.

The Whip is the product of an auspicious deal with Chinese car manufacturer ShuangHuan automotive, which tried (and largely failed) to launch a small, mid-priced gasoline car in Asian markets last year, only to find that the burgeoning Chinese middle class wanted bigger cars. When they were approached by McQuary and his team, they had a body and chassis ready to roll, and no one to sell it to. "We asked them to make about 85 modifications," McQuary said of the ShuangHuan car. The first "rolling shells" of the Whip will be shipped from China to Ontario, CA by the third week in July; there, they'll be outfitted with sealed, environmentally-sound lead acid batteries, drivetrains, and motors. After just two weeks of surgeries, they'll go out to dealers, some of which are traditional car vendors looking for a new product to liven up sales, others of which are specialized EV-only car stores. The first production run will be between 500 and 1,000 cars. (Below, the Whip next to fellow EV the Tesla Roadster.)

The full-speed car, which is powered by a more advanced (and expensive) lithium ion phosphate battery, will go on sale in 2010. Wheego will provide a trade-in program for customers who bought a Whip, and later decided to upgrade to the yet-unnamed full speed vehicle. "We have the best electric car in the world that we're launching," McQuary says, touting in particular the car's fit and finish, city-chic styling, powerful stereo and the optional A/C. "I want those early MindSpring customers to be Wheego drivers," he says. Whether or not there are enough of those MindSpring early adopters to spread over Wheego and its competitors remains to be seen, but McQuary believes that a toe-hold in the industry is all Wheego needs to build its momentum. "If I can sell five or ten thousand cars, we're off and running and profitable," he says. And all environmental ideals aside, it is profitability, of course, that will decide which EVs live and die.